Entrepreneur Britain — investing for success

The Prime Minister has called on Britain’s ‘doers and grafters’ to make this the most entrepreneurial decade in history. But to what extent will the UK’s private equity and venture capital community play a role in achieving this ambition, and how can they help to turn it into a reality?

That was the topic of debate at the Entrepreneur Britain: Investing for Success round table event hosted by Smith & Williamson and Seven Hills which brought together over 60 VCs and entrepreneurs to debate the key issues that need to be addressed to bring that vision to life.

Regulation, information and education emerged as key areas to address, according to the venture capital and private equity specialists, entrepreneurs and business reporters who attended the debate.

Expert investors from a host of leading firms including Ariadne Capital, Balderton Capital, Risk Capital Partners and Silicon Valley Bank were joined at the event by the entrepreneurs behind Caxton FX, Make It Cheaper, Brightpearl, Digby Morgan and Trusted Reviews plus reporters from the BBC’s business unit, City AM, Business Zone, Unquote and Fresh Business Thinking.

Angel investor Doug Richard issued a rallying cry for the role of venture capital and private equity in spearheading business growth in the UK — citing a host of examples, including web-based start-ups, where the UK has great potential.

Veteran investor and head of Better Capital, Jon Moulton, gave his assessment of the task ahead citing the challenge of driving growth in the current unstable economic climate.

The debate was the first step in the creation of an action plan for the UK’s investment community to help forge stronger and more beneficial connections with the UK’s entrepreneurs.

Some of the key issues raised during the debate include the following.

1. Engage and educate — The need for investors to forge stronger connections with the UK’s entrepreneur community in general and dedicate resource to educating business owners about the role of venture capital and private equity investments in driving growth.

2. Improve image — The need to address the negative perceptions of venture capital and private equity among entrepreneurs through active engagement with the business media.

3. Less private more public — The increasing need to directly engage with the department for business, innovation & skills (BIS) to improve relations with government and improve understanding of the role UK investors can play in driving the UK’s economic growth.

4. Invest in training — The opportunity to back entrepreneurship in schools and universities by engaging with those organisations focused on developing young entrepreneurs such as the National Enterprise Academy and the National Consortium of University Entrepreneurs.

Guy Rigby, head of entrepreneurs at Smith & Williamson, said: “The Prime Minister has called this the year of growth and has committed to making this Britain’s most entrepreneurial decade. For that vision to become a reality we need to create the right conditions for growth and the investment community has a major role to play in backing new British businesses. This event gathered the opinions of a group of experts who understand the challenges that investors and entrepreneurs both face and started to outline the steps that we need to take to back Britain’s entrepreneurs.”

Entrepreneur Britain: Investing For Success

Why have we brought you all here tonight? The answer is that entrepreneur Britain needs you.

Katie Prescott, Producer, BBC Radio 5:

There’s absolutely no question that British Entrepreneurs often need credit to start their businesses. If the banks aren’t lending, VCs are a another viable alternative for that.

Nick Giles, Founder, Seven Hills:

What we want today is to create an action plan this evening. If we’ve got to the end of global entrepreneurship week and there hasn’t been a meeting like this that brings the investment community and the entrepreneur community and the press together to debate how we make that a reality, then we’ve missed a trick.

Doug Richard, Founder, School For Startups:

Events like this are really very important. It’s not easy to get VCs out of their offices. We need them talking.

Michael Hayman, Founder, Seven Hills:

Is this the first generation that has truly bucked this boom and bust mentality or will there always be room for investors that are looking for quick returns, bankers that sort of need to return.

Salman Malik, Cheif Executive, Brightpearl:

What are the numbers we’ve recieved so far and what do we want those to be in ten years?

Jon Moulton, Founder and Managing Partner, Better Capital:

If we want to do something which makes it different to every ten years. It’s not just about small stuff. It’s actually getting people to be enterprising.

Colin Corbally, Director, Dowing:

A key thing that has come through has been about education.

Triona Maddick, Marketing Director, School For Startups:

A lot of people don’t have the option and seventy percent of graduates won’t have a job to go to. It’s a very very scary time.

Guy Rigby, Director, Head of Entrepreneurs, Smith & Williamson:

But if there was a better way of getting the industry to communicate with the people with their potential users as it were, that would be great.

Harry Briggs, Associate, Balderton:

We thought that you had to have a least ten million of revenues a year to even talk to ….because they didn’t really immerse, there was no such thing as an early stage. So therefore we just assumed Angel Investors were our only option, which was wrong.

Michael Hayman, Founder, Seven Hills:

There are points where clearly going to a potential financier is a bad idea. Maybe you get money that you don’t need.

Joe Wilson, PIC Private Enquiry:

In turnarounds sometimes people can be very interesting. They think that money is what they need when actually its far better to change the strategy or change the is actually what they need.

If people have a negative image of venture capital, then they’re not going to go looking for it and there’s a huge amount that the government can do to help, but it won’t be able to, won’t have a well to do it if is deemed to be helping people who have a poor public image.

Harry Briggs, Associate, Balderton:

We should be as a community probably linking more with so that we are promoting the successful companies in the universities.

Jon Moulton, Founder and Managing Partner, Better Capital:

We need to get the state down as an absolute prerequisite to growing the economy forward.

Hugh Chappell, Non- Executive Director, Time Out:

A regulation, education and taxation in reducing so many of the barriers that have been introduced over the last twenty five years or so that have made it very difficult for new companies.

Jon Moulton, Founder and Managing Partner, Better Capital:

We do, however, need to let the free market run if we’re going to get entrepreneurial things to make a difference.

Karima Serageldin, Director, Ariadne Capital:

There were so many entrepreneurs being born out of the US, is there a lack of businesses out in Europe for us to be able to support, or is the issue really about capital and shortage of capital?

Richard Griffith, Director, Smith & Williamson:

The talent leaving the UK and going overseas, what is there to stop that? Currently, science and technologies go overseas because universities perhaps hold onto the IP here, and this is probably a very simple change to make within universities that could perhaps stop a lot of this heading over to Silicon Valley, or wherever it might be, and keeping it within the UK.

Doug Richard, Founder, School For Startups:

What do you do over the next ten years and how much do we need you? And how much do you need to put on a new pair of glasses? Because the new pair of glasses are going to show you that there is a great deal of opportunity and a great deal of money to be made sitting right here.

John Maxted, Founder, Digby Morgan:

Well I think it’s been a great success, it’s been very well run, we’ve had some very high profile speakers, it’s been very well attended and I’ve certainly enjoyed it and I found it very stimulating.

Nick Giles, Founder, Seven Hills:

All in all, a terrific night, sixty people, had a lot of reviews on a very topical subject and great to be partnering with Smith & Williamson.

Guy Rigby, Director, Head of Entrepreneurs, Smith & Williamson:

Lots of debate, lots of fun, lots of contrary reviews. We started up on our table with one guy saying that he was insulted by what another guy had said. So that’s a really great start to the evening and we had a lot of fun with that.